August 2, 2012 (TSR) – Facebook has again made investors pull long faces as they saw another record low for the company’s stock on Tuesday. Shares are losing 1.6% in the early session on Wednesday, after tumbling a whopping 6% to $21.71 a share the day before.
The shares are now 43% below the $38 a share IPO debut on May 18. The company has lost over 40 billion dollars in value since coming public.
Analysts predict the major investors are likely to rid themselves of at least some of their holdings. So might executives and other shareholders.
Billions of Facebook shares are poised to be released from lockup which expires in August and will increase Facebook’s float by 276% by November. On August 16th insiders, such as employees and directors can sell 268 million shares. “Given the stock’s plunge so far, investors are braced for an avalanche of available shares from insider sales, putting more downward pressure on the stock price,” USA Today concludes.
Although Facebook’s CEO Mark Zuckerberg was swifter than some of his company’s investors to sell 30.2 million of his shares for $1.1 billion after the botched IPO, it has still erased billions of dollars from Zuckerberg’s personal fortune.
Analysts attributed the current sell-off to the announcement of Facebook-related losses by a large Swiss bank. On Tuesday, UBS blamed a $360 million loss from Facebook’s debut on exchange operator Nasdaq, becoming the latest financial institution to report a hit from the first day of trading. The bank claims it lost money due to technical problems handling Facebook stock orders for clients.
DUMPED by a Start up as ‘80% of ad clicks come from bots’
New York-based online music startup Limited Run has ditched Facebook after its research revealed an alleged advertising scam. The company claims that 80 percent of its online ad clicks on Facebook were generated from automated ‘bots,’ not humans.
While testing Facebook’s advertising system, Limited Run said it could only verify that around 20 percent of the clicks were coming from users visiting its website.
Facebook’s advertising rates are based on the number of clicks a company’s ads receive. Limited Run alleges that the ads were not clicked by real individuals, but rather by automated bots – internet software applications programmed to repeat automated tasks.
“80% of the clicks we were paying for were from bots,” the company said in a post on its Facebook page. “That’s correct. Bots were loading pages and driving up our advertising costs. So we tried contacting Facebook about this. Unfortunately, they wouldn’t reply. Do we know who the bots belong to? No. Are we accusing Facebook of using bots to drive up advertising revenue. No. Is it strange? Yes.”
The company, formerly known as Limited Pressing, also claimed that the social media giant would not allow it to change the name of its Facebook page unless it committed to buy $2,000 of monthly advertising. “Facebook was holding our name hostage,” the post said.
Facebook responded to the accusations: “We’re currently investigating their claims. For their issue with the page name change, there seems to be some sort of miscommunication. We do not charge pages to have their names changed. Our team is reaching out about this now,” Talking Points Memo reported.
A new report shows that the company may be nearing the end of its timeline, setting a record low among social media sites.
After a year of radical changes to the world’s largest social media website, Facebook’s reputation is dwindling, with user satisfaction falling below Twitter, LinkedIN and Google Plus.
With users deactivating their accounts out of privacy concerns and frustration with interface changes and advertisements, Facebook’s endless transformations may do itself more harm than good.
Facebook scored 61 out of 100 in customer satisfaction among active users, according to the American Customer Satisfaction Index. While Twitter and LinkedIN scored only slightly higher, Pinterest received a score of 69 and YouTube received 73.
The winners? Google+ and Wikipedia, tying at 78 points.
With the recent launch of Timeline and frequent privacy changes, the company is under heavy criticism.
“Why do people leave?”asked Bianca Bosker, an editor at The Huffington Post,“Lack of trust, mostly – a sense that Facebook can’t be depended on to protect our personal information and will sell us out to make a buck.”
Facebook attracts advertisers and app makers, using information that it gathers about its users’ friendships, interests and activities.
Some users are also heavily irritated by the advertisements that plague their newsfeeds and profiles.
“The advertising becomes more intrusive in the newsfeed,”said Debra Williamson, a social media advertising analyst.“Facebook has just started to roll ads out in the newsfeed in the past few months, but the ads look just like any other post on Facebook, they’re made not to be blaring or glaring in your face.”
Facebook’s disappointing public offering may also bring insight into its fading reputation. The company’s stock value plunged 26 percent since May, falling from its initial $38 per share to just over $28 per share – a risk that made Facebook appear too financially driven.
But even after a year of continuous transformations, Facebook is planning yet another dramatic change, thereby ruining part of the appeal of “Facebook stalking.” Starting July 11, posts made in Facebook groups are showing which users have viewed each post – making anonymous browsing virtually impossible.
Facebook also plans to feature engagement and wedding announcements in the same area that currently features birthdays – bringing ones relationship further into the cyber spotlight.
Although the company is desperately striving to rekindle user satisfaction through innovative changes, its attempts are simply making it “trendy” to (dis)Like Facebook. More than a third of Facebook users are spending less time on the site now than they were six months ago.
“These days, discontent with Facebook seems more the rule than the exception,”Bosker writes.
While many users rely on the network to stay in touch with their friends, it may not be long before the former king of social media passes on its crown to another platform.
“It’s worth asking how much customer satisfaction matters for Facebook, given its unrivaled 800 million user base,”Larry Freed, president and CEO of ForeSee told Fox News.“If Facebook doesn’t feel the pressure to improve customer satisfaction now, that may soon change.”